ICICI Securities Primary Dealership Ltd.

Ratings Instrument Amount (Rs. crore) Tier II Bonds 50 (Rupees Fifty Crore Only) Details of instruments/facilities in Annexure-1 ICICI Securities Primary Dealership Ltd. May 09, 2018 Rating 1 CARE (Triple A; Outlook: ) Rating Action Assigned Detailed Rationale & Key Rating Drivers The rating factors in the strong parentage of ICICI Securities Primary Dealership Ltd. (I-Sec-PD; a wholly owned subsidiary of ICICI Bank Ltd.), experienced management, strong capital adequacy, low credit risk and comfortable liquidity profile. The rating also factors in moderate profitability and volatility in trading income. Continued parentage, profitability, capital adequacy and liquidity profile are the key rating sensitivities. Detailed description of the key rating drivers Key rating strengths Strong parentage & management I-SEC-PD enjoys a strong parentage by virtue of being a wholly owned subsidiary of a strong and systemically important bank like ICICI Bank Ltd. (rated CARE ). The Managing Director (MD) & Chief Executive Officer (CEO), Mr. Shailendra Jhingan, has over two decades of experience in fixed income markets and asset management. The Chairman of the Board of Directors of I-SEC-PD is Mr. Kannan who has been with the ICICI Group since 1991 and has experience in various fields like project finance, structured finance and treasury. He also is the executive director of ICICI Bank. Comfortable capital adequacy I-Sec-PD reported comfortable capital adequacy of 40.69% (Tier I CAR: 27.79%) as on March 31, 2018 as per NBFC method. I-Sec-PD has shown healthy growth in business and is expected to have continued capital support from the promoter (ICICI Bank) as the primary dealership business enables the group to offer the entire bouquet of services associated with debt capital markets. Low credit risk and high liquidity of investment portfolio As on March 31, 2018, around 88% of the total assets of the company are constituted by stock-in-trade investments. Around 83% of the total inventory comprises exposure to highly liquid securities like G-Sec and Treasury bills. I-Sec-PD s exposure to good credit quality corporate bonds also serves to mitigate its credit risk. Entire exposure to non-government securities was in papers with credit rating in the band of A to AAA with 64% of non-government securities portfolio in AAA/A1+ rated papers. Asset quality was comfortable with nil gross NPA at the end of March 2018. 1 Complete definitions of the ratings assigned are available at www.careratings.com and in other CARE publications. 1 CARE Ratings Limited

Ability to manage market risk Market Risk is the most important risk which all Primary Dealers (PDs) including I-Sec-PD are exposed to. It is the risk of loss which PDs would incur as a result of adverse movement in interest rates. The investment portfolio of I-Sec-PD primarily comprises government securities and Treasury bills which are highly liquid. Further the corporate bond portfolio is also of a good asset quality which renders them relatively liquid. The market risk is mitigated to a great extent by the lower holding period of investments book. The holding period is at around 23 days for the corporate bonds portfolio and 2 days for government securities and T-bills. I-SEC-PD has also adopted Value at Risk (VaR) based risk limits to measure and monitor the market risk on its various equity and debt portfolios. Diversified funding profile and comfortable liquidity I-Sec-PD has a diversified funding profile with borrowings constituting 90% of total liabilities as on March 31, 2018. Majority of the borrowings were in the form of repo borrowing, Liquidity Adjustment Facility (LAF) and call money market. I-Sec-PD has a low holding period and the exposure is towards good quality instruments. Also, the short term nature of borrowings in the form of call money, repo and Liquidity Adjustment Facility (LAF) resulted into comfortable liquidity profile with positive cumulative mismatches in all the time brackets as on March 31, 2018. I-sec PD being a primary dealer has access to RBI s assured liquidity support facility. Moderate Profitability parameters I-sec-PD has a diversified income profile comprising of interest income earned on fixed income instruments held as part of stock in trade, trading gains and fee based income. Interest income has been the major source of income constituting around 93% of total income in FY18. Interest income declined by 1.31% on a year to year basis. The company reported trading gains of Rs.11 crore in FY18 as against Rs.519 crore in FY17. The considerable decline in the trading gains was due to the rising trend of interest rates in FY18. The company reported PAT of Rs.112 crore in FY18 as compared to Rs.412 crore in FY17. Consequently, Return on total assets stood at 0.73% in FY18 (P.Y.: 2.81%). Key rating weaknesses Volatility in trading income ICICI PD s trading income is volatile in nature as it is highly dependent on market interest rates. During FY16, I-Sec-PD saw decline in trading gains to Rs.289 crore as compared to Rs.353 crore during FY15. However, during FY17, declining interest rates led to 80% growth in trading gains to Rs.519 crore. During FY18, the rising trend in interest rates led to 98% decline in trading gains to Rs.11 crore as compared to Rs.519 crore in FY17. Analytical approach: Standalone approach factoring linkages with parent ICICI Bank Applicable Criteria Criteria on assigning Outlook to Credit Ratings CARE Policy on Default Recognition Non Banking Financial Companies Financial ratios - Financial Sector 2 CARE Ratings Limited

Rating Methodology Factoring Linkages in Ratings About the Company I-Sec-PD is registered as a Primary Dealer with RBI and is a wholly owned subsidiary of ICICI Bank Ltd. (rated CARE ). I-Sec-PD is in the business of actively participating in the auction of government securities complying with bidding and underwriting commitments. It also actively trades in the government securities, interest rate swaps and corporate bonds markets. Apart from being a Primary Dealer, I-Sec-PD is registered as a Category I - Merchant Banker and Portfolio Manager with Securities and Exchange Board of India (SEBI). The company has been actively involved in providing fund management services to certain Public Sector Undertaking for their retirement funds. I-Sec PD also has a Debt Capital Markets (DCM) desk which is into the business of debt syndication and advisory. The company has five offices in Mumbai, Bangalore, Delhi, Chennai and Kolkata. During FY18 (refers to period from April 1, 2017 to March 31, 2018), the total outright turnover of I-Sec-PD in the T-Bills and G-Sec market stood at Rs. 1,537,766 crore. Brief Financials (Rs. crore) FY17 (A) FY18 (A) Total Income 1627 1113 PAT 412 112 Interest coverage (times) 1.73 1.21 Total Assets 13169 17241 Net NPA (%) NA NA ROTA (%) 2.81 0.73 A- Audited Status of non-cooperation with previous CRA: Not Applicable Any other information: Not Applicable Rating History for last three years: Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to care@careratings.com for any clarifications. Analyst Contact: Name: Mr Ravi Kumar Tel: 022-67543421 Mobile: + 91-9004607603 Email: ravi.kumar@careratings.com **For detailed Rationale Report and subscription information, please contact us at www.careratings.com About CARE Ratings: CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. 3 CARE Ratings Limited

Disclaimer CARE s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. Annexure-1: Details of Instruments/Facilities Name of the Instrument Date of Issuance Coupon Rate Maturity Date Size of the Issue (Rs. crore) Rating assigned along with Rating Outlook Tier II Bonds 26-Apr-13 9.20% 26-Apr-23 85 CARE Tier II Bonds 17-Jan-14 9.80% 17-May-24 50 CARE Tier II Bonds 29-Apr-15 9.10% 29-Apr-25 95 CARE Tier II Bonds 28-Apr-16 8.70% 28-Apr-26 45 CARE Tier II Bonds 25-Apr-17 8.25% 26-Apr-27 50 CARE Proposed Tier II Bonds - - - 50 CARE Annexure-2: Rating History of last three years Sr. No. Name of the Instrument/Bank Facilities Type Current Ratings Amount Outstanding (Rs. crore) Rating 1. Bonds-Tier II Bonds LT 100.00 CARE 2017-2018 1)CARE Rating history 2016-2017 1)CARE AAA (12-May-16) 2015-2016 2014-2015 - 1)CARE AAA (09-Feb-15) 2. Bonds-Tier II Bonds LT 35.00 CARE 1)CARE 1)CARE AAA (12-May-16) - 1)CARE AAA (09-Feb-15) 3. Bonds-Tier II Bonds LT 95.00 CARE 1)CARE 1)CARE AAA 1)CARE AAA (12-May-16) (18-May-15) - 4. Bonds-Tier II Bonds LT 45.00 CARE 1)CARE 1)CARE AAA (12-May-16) - - 5. Bonds-Tier II Bonds LT 50.00 CARE 1)CARE - - - 6 Bonds-Tier II Bonds LT 50.00 CARE - - - - 4 CARE Ratings Limited

CONTACT Head Office Mumbai Ms. Meenal Sikchi Mr. Ankur Sachdeva Cell: + 91 98190 09839 Cell: + 91 98196 98985 E-mail: meenal.sikchi@careratings.com E-mail: ankur.sachdeva@careratings.com Ms. Rashmi Narvankar Mr. Saikat Roy Cell: + 91 99675 70636 Cell: + 91 98209 98779 E-mail: rashmi.narvankar@careratings.com E-mail: saikat.roy@careratings.com CARE Ratings Limited (Formerly known as Credit Analysis & Research Ltd.) Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Tel: +91-22-6754 3456 Fax: +91-22-6754 3457 E-mail: care@careratings.com AHMEDABAD Mr. Deepak Prajapati 32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad - 380 015 Cell: +91-9099028864 Tel: +91-79-4026 5656 E-mail: deepak.prajapati@careratings.com BENGALURU Unit No. 1101-1102, 11th Floor, Prestige Meridian II, No. 30, M.G. Road, Bangalore - 560 001. Cell: +91 98407 54521 Tel: +91-80-4115 0445, 4165 4529 CHANDIGARH Mr. Anand Jha SCF No. 54-55, First Floor, Phase 11, Sector 65, Mohali - 160062 Chandigarh Cell: +91 85111-53511/99251-42264 Tel: +91-0172-490-4000/01 Email: anand.jha@careratings.com CHENNAI Unit No. O-509/C, Spencer Plaza, 5th Floor, No. 769, Anna Salai, Chennai - 600 002. Cell: +91 98407 54521 Tel: +91-44-2849 7812 / 0811 COIMBATORE T-3, 3rd Floor, Manchester Square Puliakulam Road, Coimbatore - 641 037. Tel: +91-422-4332399 / 4502399 JAIPUR Mr. Nikhil Soni 304, Pashupati Akshat Heights, Plot No. D-91, Madho Singh Road, Near Collectorate Circle, Bani Park, Jaipur - 302 016. Cell: +91 95490 33222 Tel: +91-141-402 0213 / 14 E-mail: nikhil.soni@careratings.com KOLKATA Ms. Priti Agarwal 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) 10A, Shakespeare Sarani, Kolkata - 700 071. Cell: +91-98319 67110 Tel: +91-33- 4018 1600 E-mail: priti.agarwal@careratings.com NEW DELHI Ms. Swati Agrawal 13th Floor, E-1 Block, Videocon Tower, Jhandewalan Extension, New Delhi - 110 055. Cell: +91-98117 45677 Tel: +91-11-4533 3200 E-mail: swati.agrawal@careratings.com PUNE Mr.Pratim Banerjee 9th Floor, Pride Kumar Senate, Plot No. 970, Bhamburda, Senapati Bapat Road, Shivaji Nagar, Pune - 411 015. Cell: +91-98361 07331 Tel: +91-20- 4000 9000 E-mail: pratim.banerjee@careratings.com CIN - L67190MH1993PLC071691 HYDERABAD Mr. Ramesh Bob 401, Ashoka Scintilla, 3-6-502, Himayat Nagar, Hyderabad - 500 029. Cell : + 91 90520 00521 Tel: +91-40-4010 2030 E-mail: ramesh.bob@careratings.com 5 CARE Ratings Limited